Forex glossary

Equity – the secure part of the client account, considering the open positions, bound with the balance and floating rate (profit/loss) by the following formula: Balance + Floating rate + Swap, i.e. the funds on the client account less the current amount for the open positions, plus the current earnings for the open positions.

Free margin – the funds, which are not used for the security of the opened positions. It is calculated by the formula: Free Margin = Equity – Margin.

Margin – The required equity that an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit.

Margin level – determines the condition of an account. Calculated according to the formula: (Equity / Margin) * 100%.

Base currency – currency unit in which an account, balances, commission fees and payments are designated and calculated.

Balance – the total financial result of all fully executed transactions and deposits/withdrawals to/from an account.

Currency pair – The two currencies that make up a foreign exchange rate. For Example, EUR/USD.

Rising trend – every time the highest value of a curve appears, compared to previous rate values. The lowest curve points are connected by a straight line – trend line.

Intraday trade – trade oriented at gaining profit within one day.

Dealing – non-cash currency trading.

Dealing centre – company that provides access to the money market.

Account history – list of complete transactions and non-trading operations for a trading account.

Client – physical or legal party executing operations with the company.

Client terminal – MetaTrader 4.xx software product lets the client get information about financial market trades in real time terms (quantity defined by the company), perform technical analysis of markets, operate, set/change/cancel orders and receive messages from the dealer and the company as well.

Trend lines – These are straight lines, with a positive slope, drawn on a graph through low points when tendencies are rising, and with a negative slope, drawn through the high points when tendencies are on the decline. These lines define the current trends. Trend line gaps usually signal tendency changes.

Client log file – file, created by the client terminal, which records all requests and orders sent from the client to a dealer with 1 second accuracy.

Server log file – file, created by the server, which records all requests and orders received from the client to a dealer, as well as the processing result, with 1 second accuracy.

Margin trading – using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky.

Market-makers – major banks and financial firms that pledge to provide liquidity by accepting the other side of a trade in a currency, security or futures contract. Initial margin - The initial deposit of collateral required to enter into a position as a guarantee on future performance.

Non-trading operation – depositing or withdrawing funds from a trading account, or extending credit..Normal market conditions – condition of a market that meets the following requirements:

- absence of noticeable breaks in relation to the trading platform quotes;

- absence of rushing price dynamics;

- absence of essential price gaps.

Trade operation volume – number of lots multiplied by lot size.

Open position – the first part of a complete transaction result; at the opening position, the client accepts the following obligations:

- to close reverse trading of equal amount;

- to maintain equity no lower than 10% of the necessary margin.

Market opening – trade re-opening after a weekend, holidays or after a rest interval during trading sessions.

Pending order – the client instructs the dealer to buy or sell once the price reaches the order level.

Complete closed transaction – consists of two opposite and equal trading operations (opening and closing positions): buying followed by selling or selling followed by buying.

Quote tread – a block of numerical data that describes the meaning of the price at a specific time period.

Pips (points) – The smallest unit of price for any foreign currency, also referred to as points.

Lot Size – number of assets, products, or base currency defined in the contract per one lot.

Account – a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement.

Ticker – unique identification number given to every opening position or pending order within the trading platform.

Trading operation – When a client buys or sells any instrument.

Trading platform – the set of software and technical resources that support financial market trading information to be received in real time; processes trading operations, takes into account mutual obligations between the client and the dealer, and observes conditions and restrictions as well. For the purposes of the present regulation, it consists of the “Server” and “Client” terminals.

Force major circumstances – occurrences which could not be foreseen or prevented. These include: natural disasters; wars; acts of terrorism; government actions, actions of executive and legislative government authority, hacker attacks, and other unlawful acts toward servers.

Hedging – operation that protects an asset or liability against a fluctuation in the foreign exchange rate.

Price prior to non-market quoting – closing price of minute bar, prior to minute bar with non-market quoting. Price Gap – either of the following situations:

– Present quoting Bid is greater than prior quoting Ask;

– Present quoting Ask is less than prior quoting Bid.

Market opening price gap – either of the following situations:

– Market opening quote Bid is greater than market closing quote Ask;

– Market opening quote Ask is less than market closing quoteBid.

Obvious mistake – opening/closing client positions or executing client order at a price that greatly differs from price quoted per instrument in present flow quoting at the moment of processing. Or some other dealer activity or inactivity that deals with mistaken determination of market prices at the present moment.